diff --git a/src/cli/error-handler.ts b/src/cli/error-handler.ts
index eea4fc5..e688828 100644
--- a/src/cli/error-handler.ts
+++ b/src/cli/error-handler.ts
@@ -27,6 +27,7 @@ import {
 import {
   type ConfigError,
   type EmbeddingError,
+  type IndexCorruptedError,
   isMdmError,
   type MdmError,
 } from '../errors/index.js'
@@ -116,6 +117,29 @@ const formatConfigError = (e: ConfigError): FormattedError => {
   }
 }
 
+const formatIndexReadError = (e: IndexCorruptedError): FormattedError => {
+  if (e.reason === 'VersionMismatch') {
+    return {
+      code: e.code,
+      message: 'Index update required',
+      details: e.details,
+      suggestions: ["Run 'mdm index' to rebuild it with this version of mdm"],
+      exitCode: EXIT_CODE.USER_ERROR,
+    }
+  }
+
+  return {
+    code: e.code,
+    message: 'Index cannot be read',
+    details: e.details ?? `Reason: ${e.reason}`,
+    suggestions: [
+      'Keep the current index for recovery and use a fresh MDM_HOME',
+      "Run 'mdm index <source-path>' to rebuild from source",
+    ],
+    exitCode: EXIT_CODE.USER_ERROR,
+  }
+}
+
 // ============================================================================
 // Error Formatter
 // ============================================================================
@@ -245,15 +269,7 @@ export const formatError = (error: MdmError): FormattedError =>
         suggestions: ["Run 'mdm index' first to build the index"] as const,
         exitCode: EXIT_CODE.USER_ERROR,
       }),
-      IndexCorruptedError: (e) => ({
-        code: e.code,
-        message: 'Index is corrupted',
-        details: e.details ?? `Corruption reason: ${e.reason}`,
-        suggestions: [
-          "Delete the .mdm folder and run 'mdm index' again",
-        ] as const,
-        exitCode: EXIT_CODE.USER_ERROR,
-      }),
+      IndexCorruptedError: (e) => formatIndexReadError(e),
       IndexBuildError: (e) => ({
         code: e.code,
         message: `Failed to build index for: ${e.path}`,